A senior EU official has told a Greek newspaper that the root of the country’s crisis was not fiscal, but administrative.
In a wide-ranging interview with Kathimerini’s Sunday edition Thomas Wieser, outgoing president of the Eurogroup Working Group (EWG) also warned that additional debt relief for Greece will require a new agreement with the creditors.
“Personal relationships count more than quality and efficiency,” the Austrian-American economist said. “Specific groups in society, from all parties, take chunks from the economy,” he added, claiming that clientelism dominated Greek politics.
The EWG chief used the example of TRAINOSE — Greece’s public railway system. “The 700 kilometer [435-mile] railway line originally had 1,000 employees. Over the years, the number of workers went up to 7,000 although the length of the lines has remained the same.
“You can maintain this model only if you shut down your economy and do not allow foreign competition. Everything starts with problems in administration and in the distribution of the pie and ends up in huge debts.”
Yet, Wieser said he believed that after eight years of memoranda and austerity, Greece has not solved this problem.
The fact that the bailout programs focused on fiscal adjustment and less on major administrative reforms was inevitable, according to Wieser. “When a water pipe breaks you do not think how to make it look nice, but you find the cheapest plumber to collect the water,” he said.
“The more cooperative the Greek government was, the more we could concentrate on a few and important reforms,” he added.